Most of the time Ackman’s fund, Pershing Square, is almost 100% long by way of an ultra-concentrated portfolio of large stock holdings.
With spreads that a gauge of riskiness and fear at record lows, Pershing Square bought far out of the money protection against investment-grade and high-yield bond indexes.
The hedges were designed to protect Pershing Square against an explosion of volatility and financial risk if the coronavirus spread.
As of Wednesday’s close, Pershing Square was up 0.2% for the year, versus the 2o%-plunge of the S&P 500.
The maneuvering has protected all of the 58% gain Pershing Square reported to its investors in 2019.